Ottawa says carmakers facing 'significant change' amid reports Honda to suspend plans for EV plant

Honda Motor plans to thomas more definitively arrest evolution on its $15-billion electric automobile vehicle coordination compound in Canada, according to multiple news reports by Japanese media.

The Japanese automaker paused development in May last year, saying at the time that the company would review where the EV market was in two years before deciding the future of the project.

Sluggish U.S. Demand for EVs is leading the automaker to freeze the Canadian EV investment and make hybrids the centre of its North American strategy, according to the reports.

Honda already produces hybrid Civics and CR-Vs at its plant in Alliston, Ont., alongside conventional gas models.

Asked to confirm the news, Honda Canada said in a statement that it had nothing to report at this time.

Industry minister spokesperson Gabrielle Landry said the government remains in regular contact with Honda but did not say whether the company had provided an update on its plans.

Honda pauses $15B investment in Canadian EV plants

She said the automotive sector both in North America and globally is experiencing significant change.

"American tariffs and changes to U.S. Domestic policies are creating real pressures for automakers, prompting some to delay or scale back investments in electric vehicle and battery projects," Landry said.

Major U.S. Policy shifts, including announced plans to weaken fuel efficiency standards and removing financial supports for EV adoption, have reduced expected uptake of the zero emission vehicles.

Landry said Canada's auto strategy launched in February aims to transform Canada's vehicle industry to benefit from electrification, while the government continues to support and protect existing automotive facilities.

The Honda project first announced in 2024 was to receive support from the federal and Ontario governments totalling $5 billion.

Ontario Economic Development Minister Vic Fedeli said Wednesday that no money has changed hands.

"The short answer is there's no money that has been released to Honda whatsoever," the minister said during question period at the Ontario legislature when asked about the situation.

Fedeli said Honda has a 40-year legacy of producing vehicles in Ontario, and the province committed to working with them or any other automaker to bring more good-paying jobs to Ontario.

Honda's reported decision to halt development is just one of many EV projects that have fizzled out in Canada. 

GM Canada president explains decision to end electric van production in Ingersoll, Ont.

General Motors ended production of its BrightDrop electric delivery van last year, Ford Motor Co. Has pivoted from EVs to pickup truck plans at its Oakville, Ont., plant and several battery-related plants have been shelved.

Conservative MP Adam Chambers said the latest Honda decision shows the Liberal government's bet on EVs hasn't worked.

"Broadly speaking, I think it's an indictment of the government's auto policy," he said in Ottawa on Wednesday.

"Instead of rethinking their entire policy, they are doubling down."

He said the government needs to focus on securing access to the U.S. Vehicle market to ensure there's a Canadian auto industry going forward.

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